Inventory Placement Service (IPS) - Convenient but can get very Expensive
I've wrote before about using Inventory Lab to track your profit and loss. I have found that the most significant benefit for myself was that Inventory Lab showed me how significant some of the Amazon fees can be.
Inventory Lab has pushed me to go for much higher margins to combat those fees. I should be going for as high a margin as possible anyways but when you see how much the fees really eat into your profit, you begin to realize that something has to change.
In fact, in 3 out of my first 4 months reselling after accounting for all fees I made a whopping $117.35 on $34,813 of sales! That's a rockign .3% profit margin :( . Obviously that's not very good. I probably should revise my 20k challenge numbers way down.
If you went to my excel spreadsheet, it would have looked much different. For the most part, that is because of returns. I wasn't tracking returns carefully enough. But that's the point for me. Returns do matter and if you don't account for them you may think you are making a lot more than you are truly making. Not only are you fooling yourself and your bank account but you would end up paying higher taxes for no reason!
Inventory Placement Service is a great example of a fee I was paying that got real expensive on me quickly and I didn't even know it. I didn't account for it in excel but it showed up in Inventory Lab and I was floored with much I was paying.
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Inventory Lab has pushed me to go for much higher margins to combat those fees. I should be going for as high a margin as possible anyways but when you see how much the fees really eat into your profit, you begin to realize that something has to change.
In fact, in 3 out of my first 4 months reselling after accounting for all fees I made a whopping $117.35 on $34,813 of sales! That's a rockign .3% profit margin :( . Obviously that's not very good. I probably should revise my 20k challenge numbers way down.
If you went to my excel spreadsheet, it would have looked much different. For the most part, that is because of returns. I wasn't tracking returns carefully enough. But that's the point for me. Returns do matter and if you don't account for them you may think you are making a lot more than you are truly making. Not only are you fooling yourself and your bank account but you would end up paying higher taxes for no reason!
Inventory Placement Service is a great example of a fee I was paying that got real expensive on me quickly and I didn't even know it. I didn't account for it in excel but it showed up in Inventory Lab and I was floored with much I was paying.
Inventory Placement Service
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